Worried about IB background check - poor credit (8 late payments + $22.5k charge off)
Hi all, I have 8 late payments, a $20k charge off on an Amex Plat, and another $2.5k charge off on an Amex Gold on my credit report. Both cards were closed by Amex. These were due to financial hardship due to losing my job due to work visa issues (I am a foreigner) and didn't want to ask my parents for help. I have recently repaid everything and cleared all my debts, but am unsure if these records will still be a major red flag that gets a job offer rescinded in the future during credit background checks. Given how strict BB/EBs are these days, does anyone have any experience or insights on whether these records would be an instant dealbreaker that gets an IB offer rescinded despite it having occurred years ago and that everything has already been paid off? For context, I will be pursuing an MBA at Booth under then deferred 2+2 program which means I may matriculate after only getting ~2 years of full-time work experience. I intend to recruit for BB/EB IB at Booth which would be only 2-3 years later. My credit score is currently 510 which should rise by then. My concern is that these records also reflect poor financial responsibility / accountability / risk for the company's safety and am unsure how HR would interpret this. As mentioned, BB/EBs may have these strict black-and-white compliance procedures that HR may have to follow even if they wish to overlook it; not sure what these policies are. Other than that, my background is clean with no criminal record and no bankruptcies / legal action ever taken against me. Would really appreciate any insights, thank you.
These policies are not black and white. If you repaid it and it was a while ago, you won't have any problem - just have proof of that ready.
Also, when did this happen? It all falls off your credit report after 7 years, but also if you've paid the debt you should be able to negotiate with Amex to delete those from your credit report. Look into it (but don't pay a scammy company to do that for you, you can work directly with Amex).
Bad credit score is just used as a red flag to look into further but is not automatically disqualifying... if you (currently) have a ton of delinquent accounts / are in a huge amount of debt, you may be a risk to the bank. Someone who got in a bad situation years ago and has fully repaid, not an issue. I think you will be fine.
Definitely heard people not passing background checks due to credit, Im pretty sure if you just pay it off and explain the situation then it would be fine.
Hey there,
Based on the most helpful WSO content, it's clear that background checks for positions in investment banking can be quite thorough and may include a credit check. However, the impact of your credit history on your job prospects can vary.
While it's true that a history of late payments and charge-offs could potentially raise some eyebrows, it's also important to note that you've taken steps to rectify the situation by clearing all your debts. This shows a level of responsibility and commitment that could be viewed positively.
In terms of whether these records would be an instant dealbreaker, it's hard to say for certain as it can depend on the specific policies of the bank or firm you're applying to. Some may have stricter policies than others.
As for your concern about these records reflecting poor financial responsibility, it's worth noting that many people face financial hardships at some point in their lives. What's important is how you handle these situations, and it seems like you've taken steps to address the issue.
In terms of what you can do moving forward, it might be a good idea to be upfront about your past financial issues if the topic comes up during the recruitment process. This could give you an opportunity to explain the circumstances and the steps you've taken to rectify the situation.
Remember, everyone makes mistakes and faces challenges. What matters most is how we learn and grow from these experiences. Keep your chin up and keep pushing forward!
Sources: Background check for operations - How bad is this??, Messed up my past internship - How to pass background check, AM -> credit rating agency (am I being stupid?), Have banks ever canceled full time offers due to economy turning bad?
did you get the job?
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